Landbay – 6 Month Results

6 Month Results

The results for the first half 2017, investing on the Landbay platform are as follows –

Expected ROI 3.69%
Actual ROI 3.69%

This platform does not allow you to manually invest in specific loans so there is no feedback available on defaults, rather you invest in to either a fixed rate fund (3.69% ROI) or a tracker rate (currently 3.03% ROI). The vast majority of my funds on this platform are on the fixed rate option and it’s delivered exactly as expected. This is because you can set interest to auto invest and where as with other platforms you still have to wait for a investment opportunity to become available, Landbay accrues the interest as soon as a balance is queued for investment, meaning there are no gaps in return maximisation.

Up until last month the variable rate option was 3.32% ROI, it’s now dropped 3.03% ROI. Now bare in mind current UK inflation rate is at 2.8%, so in real terms the rate is a merger 0.23% ROI which makes this option entirely an unattractive investment opportunity at this time. Considering Mark Carney of the Bank Of England has been giving strong indications in recent weeks, of a possible base rate rise from the record low of 0.25% it’s interesting Landbay have chosen to do this. One would think if a base rate rise happens in the next few weeks then the variable rate should go back up. Either way Landbay are cutting it very thinly for an investor to make any kind of return on the variable rate. It is worth mentioning though, over the last 6 months Landbay have had periods of very high demand, driven more by the lack savings options in the wider market, to the point where new investors were being queued for up to 6 weeks. So Landbay could just be attempting to control demand. For me the fixed rate combined with a slightly safer investment opportunity in Landbay is encouraging me to keep Landbay on for reasons of portfolio diversification, just. But if a spike in inflation happens in the future, wiping out my fixed rate gain, i’m going to struggle to justify keeping Landbay in my portfolio.

So to conclude, Landbay has done exactly what was promised in terms of return. The platform is generally considered a slightly safer option than other platforms, because of the buffer of auto diversification plus it operates a provision fund to protect from defaults in the short term. The platform itself in a nice looking, easy to use, straight forward interface. The only negative being, which is a significant one, the rates are very low compared to what else is currently available in the P2P marketplace. I shall consider Landbay very closely over the next 6 months before deciding whether it has a place in my portfolio.

Referral link for Landbay

This link provides a referral bonus of £100 when a new customer signs up and invests £5000 using the link (T&C’s apply). The bonus is split £50 to the new customer and £50 to, any bonuses received by this blog go towards the cost of maintaining an advert free blog and will be warmly appreciated. 

Collateral UK – 6 Month Results

6 Month Results

The results for the 1st half of 2017 investing on the Collateral UK platform are as follows –

Expected ROI 13.6%
Actual ROI 12.72%
No. Live loan parts 19
No. Loan repayments overdue 0

The highest interest rate on a loan part I have on this platform is 15% the lowest is 12% so I have averaged the rates across all the loan parts to arrive at an expected ROI of 13.6%. The actual ROI is 12.72%, which accounting for timing discrepancies with deposits and reinvestments associated with a manual investment strategy, it’s pretty close to what was expected. A plus with this platform is there is no minimum investment and there has always been investment opportunities available so as soon as a balance has been released, meaning you can maximise your return. Occasionally cash back is also offered on specific loans in the primary round adding further to your return, but you have to be quick, a passive investor (logs in less than every 2 weeks) is unlikely to catch them. For the passive investor you do have the option to auto reinvest, personally I have preferred a manual strategy so far.

I am yet to experience any difficulties or defaults with invested loan parts, in fact many of the loans have already been repaid and the funds have since been reinvested in to new loan parts. I have noticed a few defaults/over due loans on the platform so it does happen, it just seems i’ve been fortunate so far. The platform itself is very easy to use, if basic. I’ve not needed to use the secondary market at this point so i couldn’t comment on that aspect.

In conclusion, i’m very impressed so far with Collateral UK considering it’s one of the lesser know platforms, looking forward to what the second half of 2017 brings.

Funding Circle – 6 Month Results

6 Month Results

The results are in for the first half of investing through the Funding Circle platform and the headlines are as follows –

Expected ROI 6.50%
Actual ROI 5.62%
No. Live loan parts 10
No. Loan repayments overdue 0

When i started investing on the Funding Circle platform you had the option to choose what to to invest in with a variable return based on risk level. This was the case right up until the 18th September 2017 (2 weeks shy of the half year review) so for the purposes of this review I will still assess based on the the original format. As you can see I had 10 loan parts invested in and all 10 performed as expected with none showing signs of default or late payments.

As for the interest rate the small discrepancy between expected and actual can be attributed to account roll up (deposits/investments being accepted, not falling on the optimum day of the month) which is to be expected with manual investments. The second reason for the discrepancy is the £20 minimum investment. This is a mixed blessing because it means there’s usually a residual cash balance (below £20) in the account, good because you can withdraw a little at any time without having to wait for a whole principal repayment, downside would be, it is effectively dead cash ie. not earning interest while it rebuilds to £20 which stunts your interest maximisation.

The changes Funding Circle brought in September basically took away the manual investment option. So you can no longer choose what to invest in, a deposit is just split evenly over the risk range for you, either ‘balanced’ for an estimated 7.5% return or ‘conservative’ for an estimated 4.8% return. Same with selling, you just choose the amount you want to sell and the platform will decide where to sell it from. However the £20 minimum investment remains in place.

In conclusion I’m fairly satisfied with the results so far, no defaults, return is as expected. Minor annoyance with £20 min investment but I get from Funding Circles perspective, it’s to keep transactions down and cost on their end. Role on the 2nd half.

Referral Link For Funding Circle

This link provides a referral bonus of £100 Amazon gift card when a new customer signs up and invests £2000 for a full calendar month using the link (T&C’s apply). The bonus is split £50 gift card to the new customer and £50 gift card to Any bonuses received by this blog go towards the cost of maintaining an advert free blog and will be warmly appreciated.

Lendy – 6 Month Results

6 month review

So the results are in for the first half of 2017 (financial year) of investing through the Lendy platform and the headlines are as follows ;

Expected ROI 12.00%
Actual ROI 4.58%
No. Live loan parts 16
No. Loan parts with repayments overdue 6 (37.5%)

As you can see the actual return on investment is significantly lower than the expected return on investment, there are a number reasons for this. Within days of starting this analysis Lendy decided to make a few changes. Firstly reverting back to its Lendy branding (formerly Saving Stream) , as well as this they announced that some of the new loans going forward would not offer the 12.00% ROI, I have seen some as low as 8.00% ROI. However this change should not affect my current investments as they are all 12.00%.

So one reason for the discrepancy comes down to my own strategy. In the name of testing the platform out, once I noticed some problematic loan parts that may be going in to default, I tried to sell on the secondary market. Unfortunately while the loan parts are awaiting a sale on the secondary market they cease to earn interest. The overdue loan parts were all on and off the secondary market over the first 3 months with all 6 being up for sale at the same time for a 3 week period. It was disappointing that not one of them came close to being sold. When selling loan parts they join the back of the queue and the closest I got to a sale was at the back of £30,000 queue, which had only progressed £2500 in 3 weeks, so by that rate it would have taken over 6 months to even get to the start of the queue. So i decided to pull the loan parts from sale. Either way i am not earning interest on these loan parts either because they are queued for sale or they in default/overdue not earning interest anyway.

Now I should clarify a few things, Lendy have updated their policy during this period, to paying interest on ‘queued for sale loan parts in the secondary market’ on request of the financial conduct authority (FCA) as part of the company’s maturing regulation compliance. However defaulting loans, logically still don’t pay interest, so doesn’t much help my situation and I will observe and report back how the new changes work out over the next period. Additionally as part of the compliance update you can no longer invest in over due/defaulting loans, some might say that should have been the case from the start but it’s a step in the right direction.

There has also been a potentially exiting development introduced in July called ‘Bonus Accrual‘. This could be seen as Lendy’s attempt to combat a seller biased secondary market place. Essentially you can earn up to extra 0.50% a month (6.00% PA based on a 12.00% investment) for holding on to your defaulting loans during the remaining tolerance period, paid once the loan is recovered. This is designed to assist developers close to completion get the job done sooner so the debts can be recovered from the sale of assets. Since this was launched a couple of months back i have continued to accrue this bonus interest on all 6 problematic investments but nothing has been paid as these loans continue to be experiencing problems.

To conclude I would describe my experience in the 1st half of 2017, using the Lendy platform as mediocre. I love the look of the platform and the ease of use. However the liquidity of the secondary market could best be described as sluggish. The rate of defaults is stark but changes have been implemented to combat this. I do have concerns that the expected ROI is delivering to not even 40%, even by extrapolating the problematic 6 loan parts missing interest, and the playing about with the secondary market, there still seems to be a discrepancy of some 2-3.00% . However investments should always be viewed in the longer term so i will continue over the 2nd half of 2017 in a hope that this situation improves, but it’s been a rocky start to say the least.